Audit committee disclosures jump over past decade

Corporate audit committees have been providing investors with a greater number of disclosures about their activities and responsibilities over the past 10 years, but there's still room for improvement, according to a new report.

The 10th Audit Committee Transparency Barometer Report, released Thursday by the Center for Audit Quality and Ideagen Audit Analytics, provides an overview of trends seen over the past decade in the report. It also shows how audit committees have become more involved in areas such as cybersecurity and environmental, social and governance reporting. Disclosures of the fact that audit committees are responsible for cybersecurity risk oversight and ESG rose by up to 50% in the past year alone. These new types of responsibilities have required new skill sets on the part of audit committee members. The report examines changes in the audit committee's composition, in terms of members and expertise, and responsibilities. 

It also points to how there's room for improved disclosures, as in how the audit committee considers the tenure of the outside auditing firm, how audit committees are involved in selecting the external audit engagement partner, and discussions of audit fees. 

"Improved audit committee disclosures serve an important role in promoting audit quality and auditor independence as well as meeting investor expectations," said CAQ CEO Julie Bell Lindsay in a statement. "We are pleased to see disclosure trends increasing but also encourage audit committees to do more in sharing how they approach their important oversight responsibilities."

Courtesy of the Center for Audit Quality